Revisiting the Work-Based Safety Net in an Era of High Unemployment
Elizabeth Lower-Basch, senior policy analyst at CLASP, gave the keynote address at the 2010 East Coast TANF Director's Conference on Oct. 21. Following are excerpts from her prepared remarks.
According to data released by the Census Bureau last month, the number of children in poverty rose from 14.1 million to 15.5 million in 2009, and the child poverty rate increased from 19 percent to nearly 21 percent. This is the highest level since before welfare reform. In other words, all the progress that we made on reducing child poverty in the late 1990s has been lost. Perhaps even more troubling, 9.3 percent of children lived in deep poverty--households with incomes below 50 percent of the federal poverty level.
These figures matter because poverty is associated both with lower levels of well-being today and with lasting consequences for both the children and society. When compared with children from more affluent families, poor children are more likely to have low academic achievement, drop out of school, and have health, behavioral, and emotional problems. These links are particularly strong for children whose families experience deep poverty, who are poor during early childhood, and who are trapped in poverty for a long time. As high as the overall poverty rate is, it's even higher for our youngest children--one out of four children under age 5 lives in poor families.
Disparities in children's cognitive, social, behavioral, and health outcomes begin as early as 9 months, and grow larger by 24 months. What this means is that poor children are falling behind before they ever start school, and they never get a chance to catch up. The duration of poverty also matters. Children who spend more than four years of their childhood in poverty are more likely to be poor for extended periods as adults, more likely to leave school without a high school diploma, and more likely to become unwed teen parents. All this, in turn, puts their children at high risk.
Even short-term increases in poverty can have negative long-term effects on children. Unplanned moves due to eviction or foreclosure disrupt child care arrangements and schooling. Parents are more likely to be stressed, depressed or just plain overwhelmed. A number of studies show that young adults who are unemployed or out of the labor force due to a recession when they should be gaining formative work experience have permanently reduced earnings prospects.
So, for all these reasons, the Temporary Assistance for Needy Families program matters for children, families, and to society as a whole, which pays the price for poverty in the form of worse health, reduced educational attainment, and lower economic growth.
In the long run, solving the problems of unemployment and poverty is clearly going to require a better economy. But for at least the next five years, we can't count on having our problems miraculously solved by the economy getting better. The nation needs to revisit our work-based safety net and figure out how TANF programs should look when jobs are not readily available.
TANF was created at a time when the economy was booming and many of its policies are based on the assumption that jobs are plentiful. Many states require extended job searches before processing TANF applications. In 2008, 75 percent of TANF recipients counted toward the work participation rate were engaged in unsubsidized employment and another 10 percent were searching for jobs.
We're now in fundamentally different economic conditions, and the TANF programs need to change.
Recommendations for the States
First, let me thank you for all your work implementing the TANF Emergency Fund. Because of your hard work -- building partnerships, developing new programs -- this program was a huge success. This program provided necessary income support but it also provided about 240,000 subsidized jobs. When Congress returns after the elections, it should extend the TANF Emergency Fund so you can build on that success.
I know that state revenues are still very depressed and that it's hard for you to think about doing more -- you're playing defense and trying to protect your existing programs. But if we continue just doing what we have been doing, we won't begin to make a dent in the problems of poverty.
Improve Access to Benefits through Modernization
According to data just released by FNS, there are nearly a million families with children who are receiving SNAP benefits who have zero income. Most of these families should be eligible for TANF, and states should think about innovative ways to reach those people. It's also important to pay attention to health care reform as it's implemented in states. Health care reform will require states to make major changes in their benefits systems and processes. TANF, SNAP and other human services programs could be left behind -- or could participate in this sweeping transformation.
Continue Subsidized Employment Programs
Using the Emergency Fund, states did amazing work to create subsidized jobs programs in 40 states, employing about 240,000 individuals. The appeal of the model is obvious - participants gained labor force experience and real skills while earning money to support their families; employers were able to expand at a time when credit markets were tight and the economic outlook was too uncertain for them to hire otherwise. Governors and mayors of both political parties supported the programs for good reason. I urge you to find a way to continue these programs.
Support Education and Training
I don't think there's anyone who would dispute that a low-income parent is better off going to school than sitting at home, doing nothing, or searching endlessly for jobs without results. To put it in economists' terms, the main cost for adults to go to school is the opportunity cost of the time they spend. When they're not working, the opportunity cost drops way down. A recession is the perfect time for people to build their skills through education and training so that they are qualified for better jobs when the economy gets better.
As far as I can tell, there has been very little change in state TANF policies around education and training during the recession. The only example that I know of is Connecticut, which passed a bill on children in the recession that included a provision that makes attending a two- or four-year degree program an approved work activity under the TANF program when the unemployment rate exceeds 8 percent for three months. Federal rules on education and training are strict. But with few exceptions, states are not taking advantage of the limited flexibility. You can do more. In particular, please make sure that TANF recipients aren't excluded from the opportunities created with Pathways out of Poverty, Health Professions Opportunity Grants, or other new training programs.
Tell a Better Story
TANF is a very important program, but too often, its value is hidden from the public. TANF administrators need to tell a better story about what they are doing with these funds, and how they are helping people. That's the only way to break out of the current negative cycle, where we don't have enough resources to provide the needed help.